Politics & MoneyMortgage

Mortgage rates return to record lows

The average 30-year fixed rate mortgage rate returned to record lows this week, while the 15-year set an all-time bottom, following the Federal Reserve’s announcement of a new bond purchase plan.

The Freddie Mac survey showed the 30-year, FRM averaged 3.49% for the week ending Thursday, down from last week’s 3.55% and matching it’s all-time low set in July. Last year at this time, the 30-year FRM averaged 4.09%.

The 15-year FRM, a popular refinancing choice, averaged 2.77%, falling from 2.85% last week and setting a record low. A year ago, the average rate for a 15-year FRM was 3.29%.

Five-year, Treasury-indexed, hybrid adjustable-rate mortgages averaged 2.76%, up from 2.72% last week and falling from 3.02% a year earlier.

One-year, Treasury-indexed ARMs averaged 2.61%, the same as last week and down from 2.82% last year.

“Following the Federal Reserve’s announcement of a new bond purchase plan, yields on mortgage-backed securities fell bringing average fixed mortgage rates to their all-time record lows which should aid in the ongoing housing recovery,” Freddie Mac Chief Economist Frank Nothaft said.

New construction on one-family homes rebounded in August, rising 5.5% to the fastest pace since April 2010. And existing home sales increased 7.8% in August to its strongest pace since May 2010.

Home loan analytics firm Bankrate, which surveys large banks, reported that the 30-year FRM fell to 3.7% from 3.81%, while the 15-year FRM dropped to 2.95% from 3.04%. The 5/1 ARM slipped to 2.69% from 2.75% for the week.



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